HP reports Q4 net revenue of $25.7B, down 9% YoY, misses earnings targets in first report since the split on November 1; stock down over 7% after hours
Context & Ripple Effects
This is HP's opening act as two companies: the split took effect November 1, and this is the first quarter reported under the new structure. The setup was already shaky — back in May, HP missed its Q2 revenue targets while hitting earnings, so today's report breaks even that weaker pattern by missing on earnings too.
The market's reaction was swift because this quarter sets the baseline for judging whether separation fixes anything. The related coverage shows the other half of the old HP following the same script: HPE missed its Q1 estimates with revenue down 10% barely a year later, suggesting the split itself did not arrest the decline.
First-order effects
- Investors mark down the new HP immediately — the stock falls more than 7% after hours, putting early pressure on management to prove the standalone strategy works.
- Missing both revenue ($25.7B, down 9% YoY) and earnings targets in the debut quarter undermines the core pitch of the split: that focused, smaller companies would perform better than the combined one.
Second-order effects
- HPE inherits the credibility problem — when it later missed its own first-year-quarter estimates with Servers and Networking declining, the market read both successors as struggling, validating doubts that separation alone reverses secular hardware declines.
Third-order effects
- The pattern holds for nearly a decade: by late 2023, [[a:846577|HP is still reporting shrinking revenue, with Personal Systems down 8% and Printing down 3%]], indicating the split addressed structure rather than the demand erosion underneath it.
- For enterprise hardware broadly, this establishes the template that portfolio surgery — splits, spin-offs, unit divestitures — cannot substitute for growth businesses, pushing both HP entities toward cost-cutting and buybacks to defend per-share results.
The trend: HP's post-split debut marks the start of a decade-long pattern in which both successor companies report recurring revenue declines, exposing corporate separation as insufficient against secular PC and printing erosion.